Can I Replace My Server with Microsoft 365?

Many businesses rely heavily on their server for network operations within their office — handling email, application processing, network rules — all of these, and much more fit within the realm of server management.

And yet, for many small businesses, that is truly all they are used for — storage, email, software, and rules such as password resets. To a small business, these simple-yet-essential processes can add up to what essentially amounts to a $20,000 computer in a closet.


On the low end, a server will end up costing your company around $10,000 — and that is a low end estimate. More realistically, a server can range between $15,000 to $30,000. This number can of course increase as the size or complexity of your business increase, but many servers will fall into this range.

Why do servers, which are essentially computers, cost so much?

  • - Cost of hardware (storage, backups, power redundancy, battery backups, processors)
  • - Labor during installation
  • - Maintenance

The cost of hardware alone for a simple server can cost upwards of 20,000 depending on how much backup storage is required. When labor and maintenance are added in, this cost can increase significantly over time. While these costs are necessary to the operations of a business with significant network loads or high storage requirements, for a small business that keeps a server running mainly to handle email, these costs are completely avoidable.

How? Through Microsoft 365.

Recently named Office365, Microsoft 365 is essentially a SaaS (Software as a Service) cloud platform that gives access to the entire Microsoft Suite — the most popular software solutions being: Teams, Outlook, Word, Excel, OneDrive, SharePoint, PowerPoint, OneNote, and Exchange.

In addition to these programs, through Microsoft 365, small businesses are able to essentially replace the entirety of their server’s functionality with cloud services.

While an on-site server would require all of the hardware and labor costs listed above, (in addition to the associated costs of Exchange server software, Client Access Licenses for every user, and spam filtering) a Microsoft 365 account allows your business to use email (in addition to all of its services) for $32 to $57 per user per month, depending on the plan you’ve selected.

Essentially, when comparing the cost of an on-site server to Microsoft 365, it is like comparing apples to oranges. Except in this case, the apples are fifty dollars, and the oranges are ten thousand dollars.


File Storage

One of the first things we tend to think of when we hear the word “server” is storage. And while on-site servers are most definitely capable of storing files, they do so at a high price. Server storage requires backup space — and storage space, when compared to backup space, is never a 1:1 ratio.

Backups will always need more storage than your actual server storage, because your backups should include your server state over a period of time — not just a single snapshot. This is especially important when facing a disaster, as a server save state from a few months ago may be needed in order to bring the server back online.

If your backups don’t have enough storage for that amount of time, your business will be out of luck. Cloud storage, on the other hand, doesn’t suffer from these problems.

While Microsoft 365 does come with storage limits, for a small business that deals with standard document formats and applications, this storage will be more than plenty to keep your business operating at full capacity — and best of all, you do not need to worry about losing data.

Microsoft 365 has two storage solutions up its sleeve: OneDrive, and SharePoint. OneDrive is useful for individual storage use, and SharePoint is perfect for managing shared databases of information and files. And because the Microsoft 365 suite is integrated within itself, Teams can be used to access and collaborate on documents hosted on OneDrive or SharePoint.

Group Policy Objects and Active Directories

Often abbreviated to GPOs, Group Policy Objects are server-wide rules companies will set throughout their network. These GPOs can cover scheduled password resets, timed screen locks, and file accessibility control.

Through Microsoft 365’s Intune application, GPOs can be set without the need of a server. In addition to this, Microsoft 365’s Azure active directory can replace a standard on-site server active directory, and can control your user authentication policies.


There is one critical business function Microsoft 365 cannot replace: print servers. While it is possible to use a cloud-based Azure server to replace your on-site print server, this potential solution leads to an incredible amount of dependencies on speed.

A cloud-based print server can cause a document to take ten or twenty minutes to begin printing, as the file has to be sent through quite a few steps before it travels from the employee’s device, to the printer in the office. Another possible solution is to install print drivers on every device in your office, but this can take time, and requires you to visit every computer when updates are necessary.

If your business wants to replace its on-site server with Microsoft 365, but requires the use of a print server, it is most often easiest to use a regular desktop computer as a print server. As Microsoft365 will replace all of the other server functions your on-site server used to handle, a single desktop computer running Windows 10 professional can handle simple print jobs for a company with fifty to seventy five employees.

If your server is long in the tooth, and may need to be replaced soon, it may not need to be. Rather than spending tens of thousands of dollars, Microsoft 365 may be able to help save you money, and increase your operational efficiency.

Jeff Blount
Jeff Blount is a vCIO for Cobb Technologies with over 14 years of experience in the tech industry, and before Cobb, worked in AEC and eCommerce. With Cobb since 2011, Jeff helps our Managed IT partners manage and grow their digital systems. When not finding solutions for SMB and enterprise level businesses, Jeff can be found out on the soccer field with his family.